Sims Metal Foresees Room for Higher Scrap Collection in the US

The sharp fall in Chinese steel exports has resulted in elevated demand and prices for ferrous scrap. Since mid-2016, the country has been reporting steady decline in steel export volumes.

SEATTLE (Scrap Monster):Sims Metals Management- the world’s leading electronics and metals recycling company announced that there exists significant room for higher scrap collection in the US.

According to the company, the per capita ferrous scrap collection rates in the U.S. remains 20% below long-term averages, thereby indicating considerable room for further growth. When compared with other developed countries, the scrap collection rates in Australia remain at lower levels. This suggests the potential for longer-term structural growth. Meantime, the U.K. ferrous scrap collection rates currently are in line with longer-term averages, the company press release stated.

The sharp fall in Chinese steel exports has resulted in elevated demand and prices for ferrous scrap. Since mid-2016, the country has been reporting steady decline in steel export volumes. The annual steel exports have declined by almost 40% since July 2016. This has boosted steel production elsewhere in the world, thereby leading to increased demand and prices for ferrous scrap. As per estimates, China has closed nearly 115 million tonnes of steelmaking capacity in 2016 and 2017. Another 35 million tonnes of steel capacity is expected to be closed over the next two years.

The company had recently carried out significant upgrades at its Jersey City and Chicago non-ferrous material recovery plants. Also, it had installed multiple copper wire chopping plants across its US, UK and Australian facilities. In addition, Sims Metal Management had also designed and installed advanced material upgrading systems for zorba at its Jersey City facility. All these initiatives are expected to boost the FY 19 EBIT by additional $60 million to $80 million.